DONALD C. CRAIB, аs Deputy Labor Commissioner, etc., Plaintiff and Respondent, v. JAY S. BULMASH, as Trustee, etc., Defendant and Appellant.
No. S004682
Supreme Court of California
Aug. 28, 1989.
49 Cal. 3d 475 | 777 P.2d 1120 | 261 Cal. Rptr. 686
Jay S. Bulmash, in pro. per., and Hugh J. Haferkamp for Defendant and Appellant.
H. Thomas Cadell, Jr., and Marjorie J. Weinzweig for Plaintiff and Respondent.
OPINION
EAGLESON, J.-This case concerns the circumstances under which an employer may assert the Fourth and Fifth Amendments to the United States Constitution as defenses to judicial enforcement of an administrative agency‘s subpena duces tecum for records of a kind which all employers are required by law to maintain.
Also, consistent with the traditional exemption of “required records” from the Fifth Amendment privilege against compulsory self-incrimination, an employer must unconditionally respond to a court order enforcing an agency‘s subpena for wage and hour records which the employer is statutorily required to maintain. The privilege does not apply where, as here, the reporting requirement is intended to promote a legitimate regulatory aim, is not directed at activities or persons that are inherently “criminal,” and only requires minimal disclosure of information of a kind customarily kept in the ordinary course of business.
The Court of Appeal therefore erred in relying on the Fourth and Fifth Amendments to reverse a court order compelling the employer to comply with the instant administrative subpena. We will reverse the judgment of the Court of Appeal.
BACKGROUND
The Division of Labor Standards Enforcement (Division) is charged with enforcing Labor Code provisions (
Here, Jay S. Bulmash (Bulmash) was appointed trustee for his sister, Serena Gluck (Gluck), and employed attendants to care for her. In February 1986, Deputy Labor Commissioner Donald C. Craib (Commissioner) issued and served6 a subpena duces tecum directing Bulmash to appear at the Division‘s Santa Barbara offices one month later and to produce time and wage records, and names and addresses, for all persons employed by the trust over the previous three-year period. In an attached declaration, the Commissioner stated that the documents were needed to “verify wages and compute unpaid overtime pay for private household employees covered under Industrial Welfare Commission Order 15-80 and employed by Jay S. Bulmash as trustee for Ser[e]na B. Gluck.” Order 15-807 requires that such records be maintained for a minimum of three years.
In written opposition to the petition, Bulmash argued that the subpena was “overbroad,” that compliance would be “burdensomе,” and that the records were not “relevant” to any matter pending before the Division. Bulmash also insisted that because the subpena was issued without “probable cause,” court-ordered compliance would amount to an “unlawful search and seizure.” After a brief hearing, the court ordered Bulmash to appear before the Commissioner and produce the subpenaed records.
On appeal, Bulmash reiterated his claim that the Fourth Amendment precluded enforcement of the subpena because no sworn factual statement establishing probable cause accompanied the Commissioner‘s petition. The Court of Appeal agreed and reversed the order. The court reasoned that, because “criminal” sanctions could be imposed for certain wage and hour violations, the subpena was a “search” for criminal “evidence” which must meet the standards applicable to search warrants. At the urging of both parties, the court also addressed the question whether enforcement of the subpena would violate Bulmash‘s Fifth Amendment privilege against compulsory self-incrimination.9 The court answered this question in the affirmative, apparently concluding that both the contents of the records and the compulsory act of production amounted to incriminating testimony of Bulmash‘s failure to pay the appropriate wage.
A. Fourth Amendment
The Commissioner essentially concedes that the instant subpena fails to comply with literal Fourth Amendment requirements for a criminal warrant issued only “upon probable cause, supported by oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.” He insists, however, that judicial enforcement of the subpena is constitutionally permissible under a standard which is less exacting than that required for a search in a criminal prosecution. Based on a recent line of cases by the United States Supreme Court, we agree.
As Bulmash suggests, it was once assumed that the compulsory production of records was a “search and seizure” in the literal Fourth Amendment sense (see, e.g., Boyd v. United States (1886) 116 U.S. 616, 622 [29 L.Ed. 746, 761, 6 S.Ct. 524]), and that subpenas, like warrants, were enforceable only if issued pursuant to a formal “complaint” or at least upon probable cause to suspect “a specific breach of the law.” (Harriman v. Interstate Commerce Com. (1908) 211 U.S. 407, 419-420 [53 L.Ed. 253, 263, 29 S.Ct. 115]; see also, Jones v. Securities Commission (1936) 298 U.S. 1, 25-28 [80 L.Ed. 1015, 1025-1027, 56 S.Ct. 654]; Fed. Trade Comm. v. Amer. Tobacco Co. (1924) 264 U.S. 298, 305-306 [68 L.Ed. 696, 700, 44 S.Ct. 336, 32 A.L.R. 786].)
However, it is now clear that such a restrictive view of the administrative process is not constitutionally compelled. As regulatory schemes havе become increasingly important in enforcing laws designed to protect the public‘s health and welfare, reliance on “probable cause” as a means of restraining agency subpena power has all but disappeared. (See United States v. Morton Salt Co. (1950) 338 U.S. 632, 641-643 [94 L.Ed. 401, 410-411, 70 S.Ct. 357]; see also 1 Davis, Administrative Law Treatise (2d ed. 1978) Investigation, § 4.2, pp. 228-232.)
The Commissioner correctly argues that the leading case is Okla. Press Pub. Co. v. Walling (1946) 327 U.S. 186 [90 L.Ed. 614, 66 S.Ct. 494, 166 A.L.R. 531] (hereafter Oklahoma Press). There, the United States Supreme Court rejected a Fourth Amendment challenge to judicial orders enforcing administrative subpenas for payroll and sales records. The subpenas were issued by the federal wage and hour administrator to determine whether certain publishing corporations were covered under, and had violated, the Fair Labor Standards Act of 1938 (FLSA).10 At the outset, the court observed that “no question of actual search and seizure” is raised where the
Accordingly, Oklahoma Press articulated a test which applied Fourth Amendment requirements only by analogy. The notion that a subpena could be enforced only where a specific charge or complaint is pending was explicitly rejected. Instead, said the court, the investigation need only be for “a lawfully authorized purpose, within the power of [the legislative body] to command.” (327 U.S. at p. 209 [90 L.Ed. at p. 630], italics added.) In addition, the requirement of ” ‘probable cause, supported by oath or affirmation,’ literally applicable in the case of a warrant,” is satisfied as long as the subpenaed documents are “relevant” to the inquiry. (Ibid., italics added.) “Beyond this the requirement of reasonableness, including particularity in ‘describing the place to be searched, and the persons or things to be seized,’ also literally applicable to warrants, comes down to specification of the documents to be produced adequate, but not excessive, for the purposes of the relevant inquiry.” (Ibid., italics added.) In a later case, the court emphasized that, while the subpena may be issued and served by the agency, the subpenaed party must have the opportunity for judicial reviеw before suffering any penalties for refusing to comply. (See See v. City of Seattle (1967) 387 U.S. 541, 544-545 [18 L.Ed.2d 943, 946-947, 87 S.Ct. 1737] [in dictum].)
This test has been routinely applied by the high court to reject various Fourth Amendment challenges to official demands for records. (See, e.g., California Bankers Assn. v. Shultz (1974) 416 U.S. 21, 66-67 [39 L.Ed.2d 812, 843-844, 94 S.Ct. 1494] [upholding reasonableness of Secretary of Treasury regulations requiring banks to report certain customer transactions]; United States v. Powell (1964) 379 U.S. 48, 57 [13 L.Ed.2d 112, 119, 85 S.Ct. 248] [holding Internal Revenue Service summons for records relating to company tax returns need not be supported by probable cause to suspect fraud]; McPhaul v. United States (1960) 364 U.S. 372, 382-383 [5 L.Ed.2d 136, 144, 81 S.Ct. 138] [finding no overbreadth in congressional committee subpena despite assertion that existence of records was never established]; United States v. Morton Salt Co., supra, 338 U.S. 632, 651-653 [94 L.Ed. 401, 415-416] [finding no unreasonableness in Federal Trade Commission order for corporate reports to prove compliance with prior decree].)
As we have done in prior cases, we apply the same test of “reasonableness” here. (See Younger v. Jensen (1980) 26 Cal.3d 397, 404-405 [161 Cal.Rptr. 905, 605 P.2d 813]; Brovelli v. Superior Court (1961) 56 Cal.2d 524, 529 [15 Cal.Rptr. 630, 364 P.2d 462].) The instant record reveals no official action beyond issuance and service of the subpena. The subpena itself does not authorize actual entry or immediate inspection, but merely requests future production of specific records at the Commissioner‘s office in another city. Thus, under Donovan v. Lone Steer, Inc., supra, 464 U.S. 408, Bulmash cannot insist upon a showing of probable cause.
To the extent Bulmash properly challenges the brеadth and relevance of the subpena, these claims are not well taken. There is no dispute, of course, that the Commissioner is entitled to investigate the type of alleged wage-order violations at issue here (
Bulmash nonetheless relies on cases upholding a form of “warrant” requirement for administrative inspections of residential and commercial property. (See, e.g., Marshall v. Barlow‘s, Inc. (1978) 436 U.S. 307, 311-315 [56 L.Ed.2d 305, 310-313, 98 S.Ct. 1816]; See v. City of Seattle, supra, 387 U.S. 541, 545-546 [18 L.Ed.2d 943, 947-948]; Camara v. Municipal Court (1967) 387 U.S. 523, 528-534 [18 L.Ed.2d 930, 935-938, 87 S.Ct. 1727].) Even in these cases, however, the “probable cause” neсessary for an administrative warrant is less stringent than that required in criminal cases. (Cf. Rush v. Obledo (N.D.Cal. 1981) 517 F.Supp. 905, 916-917; Salwasser Manufacturing Co. v. Municipal Court (1979) 94 Cal.App.3d 223, 231-234 [156 Cal.Rptr. 292].) And, as explained in Donovan v. Lone Steer, Inc., supra, 464 U.S. 408, 414 [78 L.Ed.2d 567, 576], the Barlow‘s-See-Camara trio “turned upon the effort of the government inspectors to make nonconsensual entries into areas not open to the public. [Where] no such entry [i]s made[,] . . . the enforceability of [an] administrative subpoena duces tecum . . . is governed, not by our decision in Barlow‘s [supra, 436 U.S. 307] . . . but rather by our decision in Oklahoma Press Publishing Co. v. Walling [supra,] 327 U.S. 186 (1946).” Hence, Bulmash‘s reliance on inspection cases is misplaced.
Finally, Bulmash seeks to distinguish the cases cited by the Commissioner on grounds that they all involve corporate records. (See, e.g., Donovan v. Lone Steer, Inc., supra, 464 U.S. 408; United States v. Morton Salt Co., supra, 338 U.S. 632; Oklahoma Press, supra, 327 U.S. 186; Brovelli v. Superior Court, supra, 56 Cal.2d 524.) He suggests that the rules developed for administrative subpenas were based in part on the state‘s traditional “visitorial power” over corporations. Hence, he reasons, these cases do not alter the criminal probable cause standard where, as here, “private household records” of an “individual” are involved.
The Commissioner counters that it is not the identity of the subpenaed party, but the nature of the records themselves, which is dispositive. Under his view, there is a “diminished expectation of privacy” in records which are “required to be kept and subject to agency inspection.”
No direct answer is provided by the pertinent authorities. Cases such as United States v. Morton Salt Co., supra, 338 U.S. 632, 652 [94 L.Ed. 401, 415-416], and Oklahoma Press, supra, 327 U.S. 186, 204-205 [90 L.Ed. 614, 627], indeed indicate that сorporations historically have been entitled to less Fourth Amendment protection than individuals, but do not explain the extent to which this distinction influenced the Oklahoma Press test for subpenaed records. Also unexplained is the effect of Katz v. United States
We decline to limit Oklahoma Press, supra, 327 U.S. 186, in the manner urged by Bulmash. As listed in the subpena, the documents contain information presumably accumulated in the ordinary course of business, and uniformly requested of employers subject to this or analogous statutory schemes. It would be anomalous to prevent the Division from enforcing lawful wage and hour provisions through use of its authorized subpena power solely because the employer possessing such records is an “individual,” rather than a corporation or large business. No comparable distinction is made for probable cause purposes where universal compliance with lawful building or housing codes is at stake. And, in the few cases involving subpenas directed at individuals under circumstances similar to this case, it was simply assumed that the Oklahoma Press test applied. (See I. C. C. v. Gould (3d Cir. 1980) 629 F.2d 847, 851, cert. den. 449 U.S. 1077 [66 L.Ed.2d 800, 101 S.Ct. 856] [sole proprietor]; Provenzano v. Porter (9th Cir. 1946) 159 F.2d 47, 48, cert. den. 331 U.S. 816 [91 L.Ed. 1834, 67 S.Ct. 1303] [sole proprietor].)
In any event, we agree with the Commissioner that no Fourth Amendment “privacy” claim can be asserted against an administrative subpena limited to the production of records which the subpenaed party is required to maintain, for the express purpose of agency inspection, under lawful statutes or regulations. In such cases, Fourth Amendment defenses to the subpena are those set forth in Oklahoma Press, supra, 327 U.S. 186.
Accordingly, we hold that the Fourth Amendment does not prohibit judicial enforcement of the instant administrative subpena. The Court of Appeal erred in reversing the order compelling compliance on this ground.12
Bulmash argues that, since the instant records could facially disclose noncompliance with wage and hour laws, the Fifth Amendment is a complete defense to court-ordered compliance with the subpena. He insists that all prerequisites for asserting the privilege are present, i.e., he is an individual13 who has been statutorily compelled to make incriminating statements14 which the Division could conceivably use as a basis for imposing civil and/or criminal penalties. Even though the Division does not yet have the records, and has not attempted to sanction Bulmash for substantive wage and hour violаtions, Bulmash alternatively
The Commissioner counters that the privilege simply does not apply where, as here, the subpenaed records are required to be kept pursuant to this kind of lawful regulatory scheme. He relies on a line of cases beginning with Shapiro v. United States (1948) 335 U.S. 1 [92 L.Ed. 1787, 68 S.Ct. 1375].
In Shapiro, regulations issued under the Emergency Price Control Act literally required the keeping and disclosure of sales records of a kind ” ‘customarily kept’ ” in the course of business. (335 U.S. at p. 5, fn. 3 [92 L.Ed. at p. 1792] [citations omitted].) A wholesaler complied with an administrative subpena for such records, but claimed, among other things, that the privilege applied. He was subsequently convicted under the act. The United States Supreme Court rejected his Fifth Amendment claim, stating that the privilege “cannot be maintained in relation to ‘records required by law to be kept in order that there may be suitable information of transactions which are the appropriate subjects of governmental regulation and the enforcement of restrictions validly established.’ ” (Id. at p. 33 [92 L.Ed. at p. 1807], quoting dictum originally from Wilson v. United States (1911) 221 U.S. 361, 380 [55 L.Ed. 771, 779, 31 S.Ct. 538], italics added.) Shapiro also noted that the privilege traditionally has not been applied to public records, and that records kept under the act undoubtedly had ” ‘public aspects.’ ” (335 U.S. at p. 34 [92 L.Ed. at p. 1808], quoting Davis v. United States (1946) 328 U.S. 582, 602 [90 L.Ed. 1453, 1464, 66 S.Ct. 1256] (dis. opn. of Frankfurter, J.).)
The high court hаs since declined various opportunities to reexamine this “required records doctrine.” (See, e.g., Spevack v. Klein (1967) 385 U.S. 511, 516-517 [17 L.Ed.2d 574, 578-579, 87 S.Ct. 625].) The court has upheld some Fifth Amendment challenges to mandatory reporting laws, but only after finding that Shapiro, supra, 335 U.S. 1, did not apply.
For example, in Marchetti v. United States (1968) 390 U.S. 39, 60-61 [19 L.Ed.2d 889, 905, 88 S.Ct. 697], the court held that the privilege was a complete defense to prosecution for noncompliance with federal tax and registration requirements on illegal gambling. In the court‘s view, the disclosure scheme created an impermissible and “substantial” risk of self-incrimination, because it required that lists of gambler-taxpayers be furnished to interested prosecutorial agencies. (Id. at pp. 53, 61 [19 L.Ed.2d at pp. 900-901, 905].) The court distinguished Shapiro, supra, 335 U.S. 1, primarily on grounds that “the [reporting] requirements at issue [there] were imposed in ‘an essentially non-criminal and regulatory area of inquiry’ while those here are directed to a ‘selective group inherently suspect of criminal
The same analysis was used to reach similar results in two cases decided the same day as Marchetti. (Grosso v. United States (1968) 390 U.S. 62, 64-69 [19 L.Ed.2d 906, 88 S.Ct. 709] [federal registration and taxation of illegal gambling]; Haynes v. United States (1968) 390 U.S. 85, 95-100 [19 L.Ed.2d 906, 923, 88 S.Ct. 722] [federal registration and taxation of firearms typically used to commit crimes]; see also Leary v. United States (1969) 395 U.S. 6, 12-29 [23 L.Ed.2d 57, 68-78, 89 S.Ct. 1532] [federal registration and taxation of illegal marijuana transfers].)
More recently, in California v. Byers (1971) 402 U.S. 424 [29 L.Ed.2d 9, 91 S.Ct. 1535], a majority of the court refused to apply the privilege in a misdemeanor prosecution for noncompliance with a California Vehicle Code section requiring a driver involved in an accident to stop and identify himself. In a plurality opinion joined by three other justices, Chief Justice Burger perceived the task as one of “balancing the public need” for disclosure against “the individual claim to constitutional protections.” (Id. at p. 427 [29 L.Ed.2d at p. 17].) The plurality found no “substantial” risk of self-incrimination within the meaning of the Marchetti-Grosso-Haynes trio (cited ante, at pp. 487-488) for the following reasons: Although the Vehicle Code defined some criminal offenses, the hit-and-run law was intended to promote driver financial responsibility, not to facilitate criminal convictions. The group targeted by the law-all drivers in the state-was neither highly selective nor inherently suspect of criminal conduct. The regulated activities-driving a car and being in an accident-were not inherently unlawful. In short, the statute was “indispensable” to implementing an “essentially regulatory” goal. (Byers, supra, 402 U.S. at pp. 430-431 [29 L.Ed.2d at p. 19].)
In a concurring opinion, Justice Harlan expressed concern that the privilege might impair the state‘s dual interest in ensuring financial responsibility and deterring dangerous driving through criminal sanctions. He answered the key question-whether “some sort of immunity is required as a condition of compelled self-reporting“-in the negative. (Byers, supra, 402 U.S. at p. 454 [29 L.Ed.2d at p. 32].) Justice Harlan explained that the Marchetti-Grosso-Haynes line of cases, which he authored, involved registration laws which focused almost exclusively on conduct which was criminal. “In con-
The lower federal courts continue to apply the “required records doctrine” of Shapiro, supra, 335 U.S. 1, while distinguishing Marchetti, supra, 390 U.S. 39, and its progeny. (See, e.g., Grand Jury Subpoena Duces Tecum, Underhill (6th Cir. 1986) 781 F.2d 64, 67-69, cert. den. 479 U.S. 813 [93 L.Ed.2d 23, 107 S.Ct. 64]; In re Grand Jury Subpoena to Custodian of Records, etc. (6th Cir. 1974) 497 F.2d 218, 220-221, cert. den. 419 U.S. 1009 [42 L.Ed.2d 283, 95 S.Ct. 328]; United States v. Resnick (5th Cir. 1974) 488 F.2d 1165, 1168, cert. den. 416 U.S. 991 [40 L.Ed.2d 769, 94 S.Ct. 2400].) And, following the lead of Byers, supra, 402 U.S. 424, several cases have allowed the mandatory disclosure of information which, on its face, could implicate the reporter in criminal conduct. (See, e.g., United States v. Al-khafaji (6th Cir. 1985) 754 F.2d 641, 646-648 [duty under the Gun Control Act of 1968 to report delivery of firearms to common carrier even though transporting firearms may be unlawful]; United States v. Dichne (2d Cir. 1979) 612 F.2d 632, 638-641, cert. den. 445 U.S. 928 [63 L.Ed.2d 760, 100 S.Ct. 1314] [duty under the Bank Secrecy Act to disclose export of monetary instruments even though money may be stolen]; United States v. Stirling (2d Cir. 1978) 571 F.2d 708, 727-728, cert. den. 439 U.S. 824 [58 L.Ed.2d 116, 99 S.Ct. 93] [duty under the Securities Act of 1933 to disclose details of stock transactions which were unlawful].)
The same approach leads us to reject Bulmash‘s Fifth Amendment challenge to judicial enforcement of the Commissioner‘s subpena. As contemplated by Shapiro, supra, 335 U.S. 1, 33 [92 L.Ed. 1787, 1807], the information required by section 1174 is the “appropriate” subject of a lawful regulatory scheme. The reporting law is obviously intended to encourage voluntary compliance with minimum labor standards designed for the mutual benefit of employees and employers. Such standards are enforced, not with an aim to punish, but to “ensure employees are not required or permitted to work under substandard unlawful conditions, and to protect employers who comply with the law from those who attempt to gain competitive advantage at the expense of their workers . . . .” (
Consistent with this statutory theme of statewide, uniform regulation is the significant number of “civil” enforcement techniques available to ensure employees receive the minimum wage under proper working conditions. (See, e.g.,
While the high court has placed less emphasis on other features of the “required records doctrine,” the instant subpenaed reсords undoubtedly contain information of a kind “customarily kept” by employers and having “public aspects.” (See Shapiro, supra, 335 U.S. 1, 5, 34 [92 L.Ed. at pp. 1792, 1808].) This data occupies a basic role in any employer‘s accounting practices, and must be regularly summarized in payroll statements provided to employees. (
We therefore hold that the privilege does not apply to the instant subpena for records required to be maintained and produced under section 1174.15
Lucas, C. J., Panelli, J., and Kennard, J., concurred.
MOSK, J., Concurring and Dissenting. - Although I agree with the majority that the subpoena in this case did not violate the Fourth Amendment of the United States Constitution or article I, section 13, of the California Constitution (Brovelli v. Superior Court (1961) 56 Cal.2d 524, 529 [15 Cal.Rptr. 630, 364 P.2d 462]), I cannot join them in importing the questionable federal required-records exception into our state constitutional privilege against self-incrimination.
Once again, the majority have construed the state constitutional privilege against self-incrimination narrowly and begrudgingly, treating it as a historic relic to be, at most, merely tolerated. (See People v. May (1988) 44 Cal.3d 309, 323 [243 Cal.Rptr. 369, 748 P.2d 307] (dis. opn. of Mosk, J.), quoting Quinn v. United States (1955) 349 U.S. 155, 162 [99 L.Ed. 964, 972, 75 S.Ct. 668, 51 A.L.R.2d 1157].) I dissent because the fundamental protections afforded by the California Declaration of Rights (
In relegating the discussion of Bulmash‘s stаte constitutional claims to the ultimate footnote (ante, p. 490, fn. 15), the majority have abdicated their judicial obligation to independently determine matters of state law and have impermissibly resolved Bulmash‘s state constitutional claim by a simple, mechanical invocation of current federal precedent. (People v. Chavez (1980) 26 Cal.3d 334, 352 [161 Cal.Rptr. 762, 605 P.2d 401].) However, it is incontrovertible that the California Constitution is, and always has been, a document of independent force which is the first line of protection for the
In interpreting the scope of the fundamental liberties protected by the California Declaration of Rights, we sit as the court of last resort, and guard the full panoply of rights Californians have come to expect as their due.2 (People v. Longwill (1975) 14 Cal.3d 943, 951, fn. 4 [123 Cal.Rptr. 297, 538 P.2d 753].) Consequently, the construction of a provision of our state Constitution remains a matter of California law regardless of the narrower interpretation of similar provisions in the federal Constitution. Our charter specifically provides that rights guaranteed in our state Constitution are not dependent on those guaranteed by the federal charter. (
Unfortunately, there are those who are not convinced that our state Constitution means what it says in
In light of these greater protections, I cannot join the majority in adopting exceptions which denigrate the basic purpose of the privilege against self-incrimination. The privilege reflects the framers’ opposition to the unlimited power of the government and manifests our unwillingness to subject those suspected of a crime ” “to the cruel trilemma of self-accusation, perjury or contempt.” ” (Ramona R. v. Superior Court (1985) 37 Cal.3d 802, 809-810 [210 Cal.Rptr. 204, 693 P.2d 789], quoting Murphy v. Waterfront Comm‘n.
In an effort to safeguard this fundamental privilege, we have traditionally resolved the conflict between the state‘s desire to obtain information and the individual‘s right to be free from self-incrimination by providing the individual with use immunity for any self-incriminating statements made in a civil or administrative proceeding. (See, e.g., Lybarger v. City of Los Angeles (1985) 40 Cal.3d 822, 827 [221 Cal.Rptr. 529, 710 P.2d 329]; Ramona R. v. Superior Court, supra, 37 Cal.3d 802, 809-810; People v. Coleman (1975) 13 Cal.3d 867, 889 [120 Cal.Rptr. 384, 533 P.2d 1024]; People v. Superior Court (Kaufman) (1974) 12 Cal.3d 421, 428-429 [115 Cal.Rptr. 812, 525 P.2d 716]; Byers v. Justice Court (1969) 71 Cal.2d 1039, 1056-1057 [80 Cal.Rptr 553, 458 P.2d 465], vacated on other grounds in California v. Byers (1971) 402 U.S. 424 [29 L.Ed.2d 9, 91 S.Ct. 1535].)3 Such an accommodation is eminently reasonable in this case, and Bulmash should be ordered to comply with the subpoena only if he is assured that the People will not use the material he is requested to produce as evidence against him in any subsequent criminal prosecution. Use immunity would protect Bulmash‘s privilege against self-incrimination without impairing the Labor Commissioner‘s effective еnforcement of the Labor Code. (Ante, p. 479, fn. 5.)
The majority nevertheless eschew this reasonable accommodation, and instead force Bulmash to disclose information that could reveal misdemeanor violations of the Labor Code without providing him any protection from prosecution. The majority do so by relying on Shapiro v. United States
In the absence of the most compelling justification I do not believe we should adopt an exception which compels Bulmash to surrender the very protection the privilege against self-incrimination was designed to guarantee. The fact that the government need only require records to be kept in order to demand incriminating disclosures is merely a description of what is attempted, not a rationale for obviating the privilege against self-incrimination. “The notion that because a disclosure is required the privilege doеs not apply, if extended to its full logical reach, is capable of entirely destroying the privilege.” (Mansfield, The Albertson Case: Conflict Between the Privilege Against Self-Incrimination and the Government‘s Need for Information, 1966 Sup.Ct.Rev. 103, 148-149.)
The defendant in a criminal trial “has an absolute, unqualified right to compel the State to investigate its own case, find its own witnesses, . . . and convince a jury through its own resources.” (In re Misener, supra, 38 Cal.3d 543, 556, quoting Williams v. Florida (1970) 399 U.S. 78, 112 [26 L.Ed.2d 446, 483, 90 S.Ct. 1893] (conc. and dis. opn. of Black, J.).) Rather than creating exceptions to that basic right, I believe that if Bulmash is to be prosecuted for violations of the Labor Code the Labor Commissioner should obtain evidence of his crime through the time-honored method of independent investigation. I therefore dissent.
Broussard, J., concurred.
KAUFMAN, J., Concurring and Dissenting.- “If we are to continue a government of limited powers, [] agencies of regulation must themselves be regulated. . . . The rights of the citizen against them must be made plain.” (Root, Public Service By the Bar (1916) 2 A.B.A. J. 736, 750.)
I reluctantly concur in the conclusion that the subpena enforcement order does not violate the Fourth Amendment to the United States Constitution, because I recognize there is no reasonable expectation of privacy as to records that are required to be made and maintained for inspection by a regulatory agency. Howevеr, I respectfully dissent from the holding of the majority as to defendant‘s Fifth Amendment claim. Although the United States Supreme Court has held that the Fifth Amendment to the Constitution of the United States does not apply when a regulatory agency subpenas an individual‘s records which may provide self-incriminating evidence (Sha-
While I recognize the state‘s need to verify compliance with valid police power regulations, I am troubled that, in many cases, the Shapiro rule gives regulatory agencies virtually the unchallengeable power to enforce its regulations by criminal prosecution based on compelled self-disclosure. It is wholly contrary to the state and federal guaranties against compelled self-incrimination to allow government the unbridled authority to compel an individual to provide self-incriminating testimonial evidence without at the same time preventing its use as evidence in the prosecution of that individual for any crimes disclosed therein. Accordingly, I would order defendant to produce the records the Division of Labor Standards Enforcement (Division) seeks to carry out its regulatory function, but require the government to forego their use in any subsequent criminal prosecution.
The principles which underlie the privilege against self-incrimination are deep and longstanding. “The privilege . . . prevents the debasement of the citizen which would result from compelling him to ‘accuse’ himself before the power of the state. The roots of the privilege are deeper than the rack and the screw used to extort confessions. They go to the nature of a free man and his relationship to the state.” (United States v. Wade (1967) 388 U.S. 218, 261 [18 L.Ed.2d 1149, 1176-1177, 87 S.Ct. 1926] [conc. and dis. opn. of Fortas, J.].) Indeed, the privilege has long been considered fundamental to the values upon which our nation was founded. “[A]ny compulsory discovery by . . . compelling the production of [a party‘s] private books and papers to convict him of crime . . . is abhorrent to the instincts of an American. It may suit the purposes of despotic power; but it cannot abide the pure atmosphere of political liberty and personal freedom.” (Boyd v. United States (1886) 116 U.S. 616, 631-632 [29 L.Ed. 746, 751, 6 S.Ct. 524].) Further, the privilege has been considered an important device to ensure complete and accurate investigation of suspected criminal activity. ” ‘The real objеction is that any system of administration which permits the prosecution to trust habitually to compulsory self-disclosure as a source of proof must itself suffer morally thereby. The inclination develops to rely mainly upon such evidence, and to be satisfied with an incomplete investigation of other sources. The exercise of the power to extract answers begets a forgetfulness of the just limitations of that power.’ ” (8 Wigmore, Evidence (McNaughton ed. 1961) § 2251, p. 296, fn. 1, italics omitted.)
Moreover, Shapiro‘s required-records doctrine poses an extreme danger of governmental abuse. “The doctrine invites the government to require
Three facts pervade this case which are, in my view, dispositive: First, by statute it is a criminal offense to (a) fail to pay minimum wage or overtime premium as established by the Industrial Welfare Commission (
The majority decision incorporates into California law the “required records doctrine” of Shapiro, a judicially created exception to the privilege against compelled self-incrimination, and by so doing denigrates the privilege and the principles upon which it is based. Such a decision, in my view, is unnecessary, unwarranted and ill-advised. As the Division averred at oral argument, criminal prosecution for failure to create and retain the wage and hour records (
Clearly, the majority presents defendant with the “cruel trilemma of self-accusation, perjury or contempt.” (Murphy v. Waterfront Comm‘n. (1964) 378 U.S. 52, 55 [12 L.Ed.2d 678, 681, 84 S.Ct. 1594].) Defendant may comply with the subpena, which may well establish the essential elements of a misdemeanor, i.e., violation of wage and hour laws; or he may confess that he either never created, or has since disposed of, the records required by section 1174, itself a misdemeanor (
In Shapiro, the United States Supreme Court was called upon to determine the scope of the immunity provisions of the Emergency Price Control Act (
As the dissenting justices noted, such logic could lead to recordkeeping requirements so broad as to consume entirely the guaranty against self-incrimination found in the Fifth Amendment. (Shapiro, supra, 335 U.S. at pp. 54, 70-71, 75-76 [92 L.Ed. at pp. 1818, 1826, 1829].) “Fortunately, [however,] although record keeping requirements are common . . . neither [the federal nor state governments] have seemed inclined to push the [required-records] doctrine to the limits of its logic.” (McKay, Self-Incrimination and the New Privacy, 1967 Sup.Ct.Rev. 193, 215 [hereafter McKay].)
While Shapiro has been criticized for its questionable logic (see, e.g., Sаltzburg, supra, 53 U.Chi.L.Rev. 6; McKay, supra, 1967 Sup.Ct.Rev. 193; Mansfield, The Albertson Case: Conflict Between the Privilege Against Self-Incrimination and the Government‘s Need for Information, 1966 Sup.Ct.Rev. 103 [hereafter Mansfield]; Note, Constitutional Limits on the Admissibility in the Federal Courts of Evidence Obtained from Required Records (1954) 68 Harv.L.Rev. 340), the high court‘s lapse of reason has been explained as perhaps due to the majority‘s perception of the need for strong governmental regulatory authority during wartime. (Shapiro, supra, 335 U.S. at pp. 8-15 [92 L.Ed. at pp. 1793-1797]; see Saltzburg, supra, 53 U.Chi.L.Rev. at p. 15; Mansfield, supra, 1966 Sup.Ct.Rev. at p. 149.) Chief Justice Vinson for the majority in Shapiro noted that the compelling interest in the national safety, as promoted by the Emergency Price Control Act, outweighed whatever denigration of the Fifth Amendment the required-records exception caused because “there is a sufficient relation between the activity sought to be regulated and the public concern so that the Government . . . can constitutionally require the keeping of particular records,
I find the notion of balancing the governmental interest in obtaining compelled self-incriminating evidence against a claim for Fifth Amendment protection to be highly questionable. I have always thought the privilege to be absolute. Indeed, even in cases of the most compelling nature, the trial of an acсused serial killer for example, it has never occurred to this court or the United States Supreme Court to allow the state to use evidence obtained in violation of the Fifth Amendment because the need is compelling.
Citing California v. Byers (1971) 402 U.S. 424 [29 L.Ed.2d 9, 91 S.Ct. 1535], however, the majority appear to endorse such a balancing approach. (See maj. opn., ante, at pp. 488-489.) Accordingly, the majority holds, we should ” ‘balanc[e] the public need’ for disclosure against ‘the individual claim to constitutional protections.’ ” (Ante, at p. 488, citation omitted.) In Byers, the existence of an individual claim to constitutional protection was determined by evaluating the likelihood of criminal prosecution based on the compelled self-incriminating disclosure. (Byers, supra, 402 U.S. at p. 428 [29 L.Ed.2d at p. 17].) The “mere possibility of incrimination” does not sufficiently outweigh the policies in favor of statutorily compelled disclosure; rather, to invoke the privilege one must “show that the compelled disclosures will themselves confront the claimant with ‘substantial hazards of self-incrimination.’ ” (Id. at pp. 428-429 [29 L.Ed.2d at p. 18], citing Albertson v. SACB (1965) 382 U.S. 70 [15 L.Ed.2d 165, 86 S.Ct. 194]; Marchetti v. United States (1968) 390 U.S. 39 [19 L.Ed.2d 889, 88 S.Ct. 697]; Grosso v. United States (1968) 390 U.S. 62 [19 L.Ed.2d 906, 88 S.Ct. 709]; Haynes v. United States (1968) 390 U.S. 85 [19 L.Ed.2d 923, 88 S.Ct. 722].) According to Byers, in order to determine if such a substantial hazard of self-incrimination exists, the court must determine if disclosures were sought from a ” ‘highly selective group inherently suspect of criminal activities [involving] an area permeated with criminal statutes [instead of] an essentially noncriminal and rеgulatory area of inquiry.’ ” (402 U.S. at p. 430 [29 L.Ed.2d at p. 18], citations omitted.) The majority in this case adopt this analysis and conclude, as in Byers, that employers such as defendant are not presented with a hazard of self-incrimination substantial enough to outweigh the state‘s interest in compelling disclosure of the records.
The fact that Chief Justice Burger was able to persuade only three other justices of the soundness of this approach is perhaps indicative of its weakness. As Justice Black pointed out in dissent, while the reporting statute in Byers posed no substantial hazard of self-incrimination in the abstract, such an approach ignored that the particular defendant in that case clearly would “have run a serious risk of self-incrimination by complying with the disclosure statute.” (402 U.S. at p. 461 [29 L.Ed.2d at p. 36]
Even if such balancing were deemed appropriate in cases where records are required to be kept, in this case the balance would clearly point toward precluding use of the records in a criminal prosecution. As noted earlier, the Division represented in oral argument that criminal prosecution was rarely, if ever, pursued for violation of the provisions governing overtime pay and employer-kept wage and hour records. It may therefore be presumed that the Division is able to accomplish its regulatory functions without resorting to criminal prosecution. Thus the state has limited, if any, interest in preserving the use of the records as evidence in a criminal action and defendant‘s Fifth Amendment claim should clearly prevail unless use immunity is given.
In the context of Fourth Amendment claims where a regulatory purpose is asserted as justification for a search, we insist that the targets of such a search be selected on the basis of neutral criteria in order to assure that the purpose is indeed regulatory and not based on an individualized suspicion of criminal conduct. (See Ingersoll v. Palmer (1987) 43 Cal.3d 1321 [241 Cal.Rptr. 42, 743 P.2d 1299].) Such an approach would also have value in determining the merits of Fifth Amendment claims regarding required records. For instance, if the Division in carrying out its regulatory function were to subpena records from every fiftieth or one-hundredth employer withholding state income taxes, I would have no objection to the use in criminal prosecution of records so obtained. Indeed, the Byers analysis would make sense in such a situation because, instead of focusing on an individual suspected of having violated the law and thus obviously posing to that individual a substantial hazard of self-incrimination, the agency would merely be evaluating compliance with wage and hour laws of a randomly selected group not inherently suspect of engaging in criminal activity. We adopted such an approach in the context of sobriety checkpoints to assure that police stops were conducted for essentially regulatory, as opposed to criminal investigation, purposes. (Ibid.) Although our concern in Ingersoll was assuring compliance with Fourth Amendment search and seizure constraints, such an approach would also help assure that the purpose of the compelled disclosure of wage and hour records is regulatory and not to
In sum, if Shapiro‘s required-records doctrine mandates that we weigh the state‘s interest in compelling self-incriminating disclosures against the Fifth Amendment guaranty against such self-incrimination, then absent an affirmative showing by the regulatory agency that criminal prosecution is essential to enforce a valid regulatory scheme, the agency‘s obtaining such records by compulsion must be conditioned on their unavailability for use in a criminal prosecution. In the absence of an applicable immunity provision, to avoid violation of the Constitution and to preserve the ability of the Division to perform its regulatory function, we should provide such immunity judicially. (See Adams v. Maryland (1954) 347 U.S. 179, 181 [98 L.Ed. 608, 612, 74 S.Ct. 442].)